Video: Baucus bill estimated at $829 billion

Closed captioning of: Baucus bill estimated at $829 billion

>>washington. we have breaking news. the
congressional budget office
has now released its analysis of the
senate finance committeehealth care
legislation in terms of how much it would cost. this legislation was put together by
max baucus
and amended for two weeks.
kelly
o'donnell joins us live from
capitol hill
. take us the numbers and give us perspective.

>>good afternoon, david and tamron. we have been here before where we get a 27-page report that is dense. our team is reading it now. some of the headlines, what is important from the perspective of
max baucus
is it meets the overall price tag.
president obama
said he wanted it to be lower than $900 billion. this comes in at a total of $829 billion and an important number about the deficit. while some of the spending that would provide for additional insurance would increase costs by $500 billion, there are offsets, ways they can make up for that. the net result according to the cbo
over time
is there would be a reduction in the federal deficit of $81 billion. now, it looks at who would be insured. this estimate says 94% of americans would be insured. that means the nonelderly because seniors get medicare. those people who don't have insurance now, more than 20 million people would be able to purchase insurance through a variety of plans we have been talking about in what is known as the exchange. it would still leave 29 million uninsured based on the specifics in this plan. part of how they
raise money
would be taxes on some of those companies that may not provide
health care
for their members. there is a lot of detail. the headlines, the thing that will matter, it meets the cost the president set, will be beneficial to the federal deficit and increase the number of people who get insurance up to 94% of americans. those are the headlines. i have charted and graphs and 27 pages i'm poring over to give you the nitty-gritty.

>>kelly
, before we let you do that, because it is $829 billion, fair to characterize this, this means there is less money they have to bring in in terms of revenue. the fight over how much to raise in taxes because this dropped below $900 billion you could suggest that makes it easier?

>>yes. this is less expensive than the expectations, which was about $850 billion before the cbo got its hands on the revisions we have watched play out over these past several days. because there will be additional spending for
health care
, the cost for the
federal government
will go up. the way they fix that is by making cuts in other places and increasing taxes and creates new sets of fees. all of those things at the heart of the debate. when you offset those it comes within the price tag chairman baucus and the president said they wanted. we will be anxious to hear what republicans have to say. we are watching it all right now.

WASHINGTON — Health care legislation drafted by a key Senate committee would expand coverage to 94 percent of all eligible Americans at a 10-year cost of $829 billion, congressional budget experts said Wednesday, a preliminary estimate likely to power the measure past a major hurdle within days.

The Congressional Budget Office added that the measure would reduce federal deficits by $81 billion over a decade and probably lead to "continued reductions in federal budget deficits" in the years beyond.

The report paves the way for the Senate Finance Committee to vote as early as Friday on the legislation, which is largely in line with President Barack Obama's call for the most sweeping overhaul of the nation's health care system in a half-century.

At the White House, spokesman Reid Cherlin said the analysis "confirms that we can provide stability and security for Americans with insurance and affordable options for uninsured Americans without adding a dime to the deficit and saving money over the long term."

Sen. Max Baucus, D-Mont., the committee chairman and principal architect of the measure, hailed the estimates within moments of receiving them.

"This legislation, I believe, is a smart investment on our federal balance sheet. It's an even smarter investment for American families, businesses and our economy," he said on the Senate floor.

Middle of the roadThe committee Baucus chairs is the fifth and last of the congressional panels to debate health care. The Senate Finance version has a decided middle-of-the-road flavor, shunning any provision for the government to sell insurance in competition with private industry. That provision, strongly favored by many Democrats and just as strongly opposed by Republicans, is still alive in proposed House versions of the legislation.

The Finance Committee bill does not require businesses to offer coverage to their workers, either, although large firms that do not would be required to offset the cost of any government subsidies going to those employees.

While generally positive about the legislation's effects, the report contained important caveats.

One noted that the estimate does not include the costs of proposed payment increases for doctors serving Medicare patients, roughly $200 billion through 2019. Additionally, a so-called fail-safe mechanism to hold spending in line could result in cuts as large as 15 percent in federal subsidies designed to help the poor afford insurance, CBO said.

Beginning in 2013, the measure would require that millions of Americans purchase private insurance for the first time, and would set up a new marketplace where policies would be available. Failure to obey the requirement would result in penalties of up to $750 per family.

Video: CBO: Health reform could reduce deficit
Federal subsidies would be available to millions of lower-income individuals and families to help defray the cost of coverage that would otherwise be out of their reach. The alternative to government-sold health care, a proposal for nonprofit co-ops that would compete with private companies, was judged largely ineffective by budget officials. Such arrangements "seem unlikely to establish a significant medical presence in many areas of the country," they wrote.

The legislation also would ban current insurance industry practices that deny coverage on the basis of pre-existing medical conditions, and restrict companies' ability to charge vastly higher premiums on the basis of age, gender or other factors.

Compromise legislationThe measure would be paid for through a variety of tax increases and spending cuts, including savings of hundreds of billions of dollars from Medicare, the federal health care program for seniors.

Democratic leaders in both houses are hoping to hold votes on health care on the floor of the House and Senate within a few weeks.

Anticipating approval by the Finance Committee this week, Majority Leader Harry Reid is already overseeing efforts to merge that bill with an alternative approved by the Senate Committee on Health, Education, Labor and Pensions.

Reid is subject to intense cross-pressures, not only from the members of the two committees, but also from the Obama administration and rank-and-file senators seeking to mold the legislation to their liking.

Reid also must take into account the likely need to amass 60 votes behind any legislation., the majority needed to overcome any Republican filibuster.

'Under the proposal'Baucus has expressed confidence he has the votes for his measure inside the Finance Committee, and the major lingering question there is whether Sen. Olympia Snowe, R-Maine, will break ranks with fellow Republicans and vote for it. She has been steadily noncommittal in public statements, but is under pressure from her own party to oppose the legislation.

Wednesday's report to Baucus from CBO's director, Dr. Douglas Elmendorf, stressed that the estimates were preliminary.

It said that by 2019, "the number of nonelderly people who are uninsured would be reduced by about 29 million," either through private insurance or by enrolling in federal programs. That would leave an additional 25 million uninsured, about one-third of them illegal immigrants who are not eligible for coverage under the bill.

"Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent," Elmendorf said. Elderly Americans are eligible for coverage under the federal Medicare program.

The report was released as House Democrats met privately to consider ways to hold the cost of their version of the legislation to the $900 billion 10-year limit that Obama has set.

Officials said one of the options under review would add as many as 7 million lower-income individuals to Medicaid, the federal-state health care program for the poor. It would be cheaper for the government to cover costs under that program than to pay subsidies designed to make private insurance affordable for the same group. Aides put the savings at about $25 billion over 10 years.

Separately, House Republicans held a news conference Wednesday to criticize proposals for trimming Medicare, the federal health care program for seniors, by more than $500 billion over a decade. Rep. Roy Blunt, R-Mo., said the effect would be to "put Medicare in jeopardy to put money into a new program" of health care.

Blunt and Reps. Nathan Deal, R-Ga., and Adam Putnam, R-Fla., said Medicare could be trimmed to eliminate waste and fraud, but they did not say how much could safely be saved. Rep. Marsha Blackburn, R-Tenn., said she opposed any cuts in projected spending under the program.

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